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SMi’s Italian PPP Forum Conference Rome, 25 September 2006 Radisson Hotel - Via Filippo Turati, 171

SMi’s Italian PPP Forum Conference Rome, 25 September 2006 Radisson Hotel - Via Filippo Turati, 171. Improving Investment Prospects in Infrastructures and Energy Projects in Italy: Problems and Solutions Luigi Marsullo President, Finpublic – Project Financing, Italy

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SMi’s Italian PPP Forum Conference Rome, 25 September 2006 Radisson Hotel - Via Filippo Turati, 171

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  1. SMi’s Italian PPP Forum Conference Rome, 25 September 2006 Radisson Hotel - Via Filippo Turati, 171 Improving Investment Prospects in Infrastructures and Energy Projects in Italy: Problems and Solutions Luigi Marsullo President, Finpublic – Project Financing, Italy Piazza G. Verdi, 9 – 00198 – Rome (I) phone +39 068415938 – fax +39 068549369 Email info@finpublic.it mobile +39 3356289831 www.finpublic.it

  2. The Italian background • The Public sector has traditionally played a major role in infrastructures projects in Italy • The public expenditure reduction has given rise to a significant impact on investments • Social role of the infrastructures: this is the starting point for a new framework • A new co-operation between public sector and private investors is needed

  3. Key-factors for financing (1) • Adequate evaluation and scheduling of projects, sharing decisions with local authorities • Profitability of the projects, with market ROI and ROE ratios of the investments • Faster and easier administrative procedures for projects authorisation • Stakeholders involvement and social commitment for local consumers FINPUBLIC srl – Project financing - Piazza G. Verdi, 9 – 00198 – Rome (I) phone +39 068415938 – fax +39 068549369 Email info@finpublic.it mobile +39 3356289831 www.finpublic.it

  4. Key-factors for financing (2) • Availability of public loans and grants (Programme-Contracts, Law 488/92 and green-certificates for renewable energy) • Attractiveness for Banks and Investors, in terms of costs, timing and granted yields • Proper cost-benefit analysis, also from a socio-economic point of view • Certainty of prices (raw materials supplying, operation flexibility, technology reliability) FINPUBLIC srl – Project financing - Piazza G. Verdi, 9 – 00198 – Rome (I) phone +39 068415938 – fax +39 068549369 Email info@finpublic.it mobile +39 3356289831 www.finpublic.it

  5. The challenge: definition of public/private roles • Sectors that are fully liberalised and other sectors affected by rules of public governance • Utilities services operated under concessions by central or local government • Quality and performance of Italian public utilities needs huge investments: financing is a key-issue

  6. The Italian energy framework • Italy is strongly dependent on external sources • Average energy prices in Italy are higher than in the rest of Europe • Energy policy is presently driven by market liberalisation, devolution to the Regions and diversification of supply sources • Complex administrative procedures are required to conduct exploration and production investments

  7. Energy market trends • Improve integration of the Italian energy market into the single European market • Promote the process of liberalisation of the electricity and gas markets • Prepare the tools to promote and facilitate investments • Increase transparency of markets rules and streamline administrative procedures

  8. Recent issues in the Italian energy policy • Diversification of energy sources and increase of efficiency • Secure timely investments in energy-related infrastructures • Clarify the responsibilities of Regions and Central Government

  9. Energy investment outlook • Total investment requirement for energy infrastructures in Italy over the period 2006-2010 is expected in the range of 10-15 billion Euros

  10. A new approach for financing • Implementation of new financing approaches is required, according to international experiences: • Project financing schemes: PPP, DBO, PF • Performing bonds for operation and maintenance of energy infrastructures

  11. The opportunities • The Italian energy market may present significant opportunities to new investments • Fair competition and transparency have to provide companies with a proper playground • Financial and business environment looks friendly towards renewed and strengthened Public-Private Partnership and co-operation

  12. All rights reserved. No reproduction without Author’s expressed authoritation. luigi.marsullo@finpublic.it +39 3356289831 • FINPUBLIC srl – Project Financing Piazza G. Verdi, 9 – 00198 – Rome Tel +39 068415938 – Fax +39 068549369 E-mail: info@finpublic.it

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